Wesabe: a Web-Based Personal Finance Tool

There’s a fantastic new tool available for those who want to track their spending. Wesabe went public yesterday.

Our site is live and available for everyone to use. We set out to build a tool to help people gain control over their money, and we believe we have accomplished our goal. It isn’t perfect and we have a ton of features we want to add, but this product helps people right now.

Wesabe is a community-based personal finance site which allows users to track their bank accounts (privately) while sharing money tips and goals (publicly). Think del.icio.us or Flickr or 43things, but for money. To quote the FAQ:

What does Wesabe do?
Wesabe is a community of people who share our experiences with our money so we can help each other make better financial decisions. We do this by aggregating and analyzing our community members’ personal financial data, and showing tips — recommendations to get the most from our money. These tips and recommendations come from the collective wisdom of our entire community. When one of us figures out how to make a great decision, we all learn.

I’ve been playing with Wesabe for a couple of weeks now. Here are some first impressions.

Accounts

When you first login to Wesabe, you’re given an opportunity to upload data from your bank accounts. You can do this manually by exporting the information from your bank’s web site and then uploading it to Wesabe (sort of like uploading a photo to Flickr). Or you can download and install a tool (for Mac or Windows) that will do this for you automatically.

Once account data has been imported, you can modify it by entering store names and by tagging each transaction. For example, I bought new tires for my wife’s car at the beginning of November. I had to change my bank’s metadata after importing the transaction. I changed the gibberish to “Les Schwab” (the name of the tire store), and then tagged the transaction “car hondacivic”. This transaction is now visible whenever I view my entries tagged “car”, and whenever I view my entries tagged “hondacivic”.

Your account data is visible only to you. But your numbers are included in community aggregates. For example, nobody else can see that I spent $4.98 for milk and bread at Safeway yesterday, but my $4.98 tagged “food groceries” is included anonymously in the aggregate community data. This helps users get some idea of what is “normal”. It also helps when offering tips and setting goals.

Tips

Wesabe members can share money-saving ideas with one another. These, too, can be tagged. For example, the following tip was tagged “art entertainment museum”:

Nearly every art museum has free admission at least one day a month. By doing a bit of research, you can enjoy some culture on the cheap.

Other users can comment on tips. They can also save them as favorites. (So each user will gradually acquire a list of favorite money tips to use for inspiration.) I love this because it draws upon the wisdom of the community — the power of this feature will surely grow with Wesabe’s user base.

Goals

Users can also designate goals, such as “avoid overdraft fees”, “save for vacation”, or “contribute to my IRA”. There’s a discussion area where the Wesabe community can comment on goals, offering advice and encouragement. Tips for each goal appear based on its tags. To track your progress, you can link tags from your own accounts to a goal. For example, if one of my goals is “contribute to my IRA”, I would link it to the IRA tag from my accounts. I haven’t used this feature yet, so cannot comment on its effectiveness.

Tags

Wesabe’s tagging system is a key to its power. Every transaction, every tip, and every goal can be tagged. If you’ve ever used Flickr or del.icio.us, tags will be instantly familiar. They’re one-word descriptors used to categorize your transactions (and tips and goals). For example, if you take your friend Sue out for dinner at a nice restaurant, you might use three tags for the transaction: “food restaurant friends”. The ever-present list of tags can be used to check your spending. If I click on the “food” tag, for example, I get a list of all my recent food transactions, as well as graphs representing my food spending over time. I can also access tips tagged “food” from other Wesabeans.

I’ve taken to tagging any purchase that is a gift to myself, or an extravagance, or any non-necessary thing with: extra. In a click, I can see how much money I waste each month on silly gadgets, bike upgrades, and wacky t-shirts. There was never an easy way to get that kind of data from Quicken.

On Matt’s advice, I’ve been tagging my unnecessary spending as “extra”, too. Whenever I buy comic books, for example, they’re tagged “comicbooks extra”. This is something you cannot do in Quicken, and it’s surprisingly powerful.

Conclusion

I often stress the importance of tracking what you earn and spend. It’s one of keys to accumulating wealth. From my limited use of Wesabe (I’ve only been using it for a couple of weeks) it offers some keen features. I can’t foresee it replacing Quicken at this point (and I’m not sure its creators intend for it do so), but it’s certainly an excellent supplemental tool.

So far, I’ve had just two issues with the site. The tagging system can take some getting used to. Wesabe cleverly uses two levels of tags: one for “just this entry” and another for “each time this transaction occurs”. This is powerful, but can be confusing, too. I recommend being cautious in the use of global tags. Also, Wesabe had some difficulty parsing data from my credit union. But the response to my bug reports has been quick and efficient.

If you’re worried about uploading your bank data to another site, perhaps Wesabe’s security policy may set your mind at ease.

I imported some credit card and some checking account data into Wesabe on Friday, and so far, my jury is still out.
While it’s very purty, I don’t see it accomplishing much more than the excel spreadsheets that I carry on a thumbdrive to track my expenses.

I get the feeling the jury will come back with a verdict of Nice, But Unnecessary.

This seems to me to merely be a rehash of 43things, except with additional privacy invasion. If a lot of people used this, the data could be a very, very valuable tool for marketers. What’s “normal” to spend should be normal to you and your income level, not normal to the whole world.

This is a great article about the tool that convinced me never to go near it.

Sounds like a Web version of Quicken/Microsoft Money with fewer features (no investments or assets, right? so no overall net worth picture etc) but with the currently-correct buzzwords (“social”, “tagging”).

Apart from the security/privacy issues, consider also this: what happens if you’ve adopted Wesabe for your financial records and, 12 months down the line, they go out of business? Or start charging a monthly fee?

I find Wesabe intriguing; but I’m pretty happy with my 7-year-old version of Microsoft Money and don’t see anything compelling enough to get me to switch or to run in parallel.

(Oh, and I have a big aversion to relying *only* on downloaded statements for account reconcilation: believing only what your bank says is a good recipe for allowing fraudulent transactions or unjustified interest or fees to slip through unnoticed. I’ve had both happen in the past; my practice of entering spending as it happens and then reconciling against the monthly statement caught it.)

Reasonable concerns and reactions. I’ve long been an advocate for online privacy (you can look at my posts on http://radar.oreilly.com/marc/ to see some of what I’ve said about it), and I wouldn’t want you or anyone uploading private data unless you had great reason to do so.

Wesabe is intended to be a great reason. For the concerns about “what happens if they go out of business,” please check out our “data bill of rights” at https://www.wesabe.com/page/security which says:

* You can export and/or delete your data from Wesabe whenever you want.

* Your data is your data, not ours. Our job is to help you understand and act on your data.

* We’ll keep all of your data online and accessible for as long as you have an account. No “archive access” charges.

* Any data you want us to keep private, we will.

* If a question comes up not covered by these rights, we will answer it remembering that your data belongs to you.

If you want to read more about this, take a look at blog.wesabe.com, where I write about this topic often.

I think Wesabe offers more than Quicken or Money ever could, because it builds a community of consumers helping each other find better values. If you’re looking for a way to get better data and better advice about a purchase or a merchant, we can do that, and we do it by matching advice to your personal finances.

Think of it this way: when you walk into a car dealership, they can find out your credit rating, income, roommates, magazine subscriptions, political donations, and a ton more. What can you know about them and whether they’ll provide good value for you? Through Wesabe, you can see how much an auto shop charges on average, and how people feel about their purchases afterwards. That’s incredibly valuable if you’re looking for a good place to spend your money on something you need.

If you’re not comfortable uploading, you can still join at get and share tips and goals, and look at our reports on merchants and tags. I think that many people will find good reason to go from browsing to more, but that’s a great way to see what could work for you if you like the early experience.

Thanks to J.D. for the great write up, and to all of you for your comments. Feel free to write me at marc@wesabe.com if you have questions you want answered.

@James, we offer free memberships to manage up to three bank or credit card accounts, and a ‘pro’ version for up to 12 accounts. The pro version will be $4.99/month, but if you upload any data in 2006, you get a pro account for 2007 for free. We do not intend to sell ad space and certainly are not planning to sell people’s data to marketers.

Also, it’s great that you reconcile your accounts — the reason we don’t have that now is because so few people I could find do it at all — even some Quicken users! It’s a lot to ask of people to track, and while I agree it is wise to do, we didn’t consider it a launch feature for that reason. We’d like Wesabe to be as automated as possible, and to add manual features later. We do, though, plan to add cash tracking and upcoming transactions in the near future, and investment management later.

If there is a big idea in this, it will be different than the original concept and created by the users who will hijack it. That’s what happened to myspace and youtube.

The original concept is interesting, but I think it is missing a key point. Tracking where the money is going is only a (small) part of the solution. Know what to do with the information and how to do it is the big opportunity. I would be pleasantly surprise if the community can do the second part.

Like many, many other things this sounds like an interesting time waster. I can’t even find enough time to enter all my expenses into quicken like I used to before I got married and have kids. I now manage to get by with just eyeballing statements for unexpected charges and fees, and updating my share dividends and capital gains data once a year at tax time.

Any ‘spare’ time I have outside work and family commitments goes towards doing a P/T master’s degree and managing my investments – things that will have a bigger long term impact on my networth than wondering if I was charged too much for my last car service.

@Joe, I agree, we need to add cash tracking. What we wanted to do was make everything as automatic as possible, so that entering your data wouldn’t be a chore (see Ralph Morgan’s and Binary Dollar’s comments, just below yours). Now that that’s working, we’re planning to add other kinds of financial data, including cash tracking. Whenever possible, we want everything to be automated, and for many people, just knowing “I took $100 out of the ATM this week” is enough detail to start making changes and improvements in their financial lives.

You’re wrong about US — we currently support a number of banks outside the US, and while we need to clean up our currency support, we’re doing that on requests from users.

Super Saver, you could be right! I would be very happy if people found good uses for the site beyond what we originally thought of. I’m hearing tons of great feedback from people using the site today, so I think what we have won’t need to go away, but as people want more, we’ll find the right ways to help.

[...] I could go on and on about the features of Wesabe, but I’d just be repeating the content of this excellent introductory post on Get Rich Slowly. If you’re more of a visual type, just visit Wesabe or watch this wonderful orientation video. [...]

[...] Find Out For Yourself In order to build their base Wesabe is offering free membership at its Pro level for all of 2007 if you sign up and create an account in 2006. I signed up for one today and am eager to check out what Wesabe has to offer. For more information on things such as setting up an account, offering tips, tagging transactions, and privacy read a review over at Get Rich Slowly. [...]

I like the social idea of this one. That’s sort of a novel approach to it. I currently use Yodlee (https://moneycenter.yodlee.com) to track this stuff and it’s lot slicker and easier than Wesabe, but does lack any kind of community-based tips to help me out.

What are the best sites for learning about Wesabe? We’ve started with these. What else should be here?
1. Wesabe – Web-based community provides users with personal financial tracking tools and encourages the sharing of tips and experiences. (www.we…

Just for reference sake, where you say you can’t tag unnecessary spending in Quicken, that’s not entirely true. Quicken (2002 and beyond, at least) allows you to set up expense categories and subcategories, and also allows you to group these categories (mandatory and discretionary by default). You can associate any of these categories with any transaction, which should provide the functionality you need. If not, you can simple write the word ‘extra’ in the memo field and do a find all transactions with that keyword. It may not be as simple as a quick tag, but it is possible to get the same functionality.

I think Wesabe has value for those on the 1st rung of the personal finance tranformation, namely figuring out where all the money goes.

I’ve been looking for a tool for some time and while Quicken & MS Money have all these seemingly fantastic tools, to be honest, I can’t be arsed doing a 3 month intensive course so I can figure out how to use them. There’s such a thing as feature bloat and those two have it spades.

I’ve tried Excel but it’s just too endlessly malleable for an inveterate tinkerer like me, I seem to spend more time trying to colour my cells the right shade of baby pink than actually, I don’t know, looking at the numbers.

Wesabe seems to work for me for now. I worked it out in an hour. Perhaps later, when I’ve mastered monitoring my finances, I may want to move on to something more powerful but then again, maybe not and maybe Wesabe will have evolved by then.

[...] you folks? Have you used Mint? Do you like it? How would you improve it? Last year about this time, I reviewed Wesabe, another online personal finance tool. Have any of you tried both? How do they compare? For myself, [...]

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